- Apr 21, 2016
- China New Town Signs Agreement Disposing of Shanghai Assets Strengthens the Capital Base for the Core Business of Development in New Urbanization
(Hong Kong and Singapore, 21 April 2016) China New Town Development Company Limited (the “Company” or “CNTD;” HKSE: 1278.HK; SGX: D4N.SI) has today announced that the Company has entered into a formal agreement regarding the disposal of a number of assets with SRE Group Company Limited (“SRE Group”) and SRE Investment Holding Limited (“SREI”). According to the agreement, certain assets held under the Shanghai Golden Luodian Development Company Limited (the “Shanghai Disposal Assets”) are to be disposed to SRE Group at a consideration of approximately RMB1.315 billion, which will be paid in installments. It is expected to receive a consideration of over RMB1 billion by the Company in early May.
At the time of the equity subscription of the Company’s controlling shareholder China Development Bank Capital Corporation Limited in October 2013, the Company has clearly formulated a strategy of disposing of part of the assets for secondary development, as well as those assets that do not fit into the Company’s core strategies. This disposal is aimed at reallocating financial resources and management efforts to the Company’s core business of primary development, new town planning, and investment and development of major cities in China.
Since that time, the Company has remained fully committed to this strategy. Apart from clearing the disposal assets under the Disposal Master Agreement, including the equity interest in the project companies at Wuxi and Changchun, thereby exiting from regions with uncertain prospects while recovering substantial cash value. The proper disposal of the Shanghai Disposal Assets in accordance with the Disposal Master Agreement this time completes the disposal agreement with SREI, concluding the 2 years process of assets disposal. This eliminates the burden of historic assets and optimizes the asset structure of the Company, enabling a greater focus on the development of core strategies. Thus the Company can more actively explore business opportunities in line with its strategy and solidify its foundation for future business development.
China New Town will fully utilize the proceeds obtained from the disposal of assets to develop the core business of the Company, and focus on enhancing the development in the investment in and construction of new-type urbanization in China. The Company will also strengthen its development in the Yangtze River Delta, the “Beijing-Tianjin-Hebei” area and other first-and second-tier cities as it makes long-term investments, while keeping several high quality assets. Meanwhile, the Company will also enter the downstream industry chain through continuing investment as well as mergers and acquisitions more closely linking up with regions with existing projects, and add value to these regions. At the same time, the Company will strive to achieve better investment returns for shareholders.